Student Loan Relief is on the Way
President Joe Biden announces Student Loan Relief Plan. Photo Courtesy of Evan Vucci / AP
October 19, 2022
College education is ingrained in our minds from a very young age. From parents to educators, we are told that if we want to succeed in life, then getting a secondary education is a must. What these leaders in our life failed to mention was the cost it takes to obtain a degree. Many individuals put off the idea of college due to the amount of money it takes to obtain a single four year degree. Some take their chances and are encouraged to take out loans that will leave them with a lifetime of payments once they graduate.
President Joe Biden announced on August 24 his plans to relieve students of their debt with a three part plan. The plan will cover up to $10,000 in loan debt. For those who were approved for federal pell grants, they are eligible for relief up to $20,000. This pertains to those who make under $125,000 a year, and those who are over this tax bracket do not qualify at all. Loans that have been disbursed by June 30 of 2022 will be eligible for the program.
According to a fact sheet provided by the White House, pell grants only cover a third of educational expenses, meaning that many students from low income families who qualify for grants still need to borrow loans in order to attend college. At least 66% of pell grant recipients come from households who make less than $30,000 a year. This plan also moves to help those that have taken a financial hit from the pandemic, making loans a hassle to repay. “I believe my plan is responsible and fair. It focuses on the benefit of middle-class and working families, it helps both current and future borrowers, and it’ll fix a badly broken system.” Biden said.
According to the New York Times, payments have been paused once more until January of 2023, and there is a plan to reconstruct the current income based repayment plan. Before Biden’s plan was announced, loan repayments became a struggle for the working class of this country. This relief will help alleviate some of the stress that is brought on by these educational debts. The plan also aims to apply appropriate credit to those who have worked for non-profit, federal, local, state, and tribal governments or those who are in the military. There is also an element of cutting current monthly payments in half for loan borrowers to make payments more attainable. It is recommended for those who will apply for relief to check in on their credit scores to ensure that their loan servicer has provided accurate information to the credit bureau. This is due to the amount of money involved and the amount of individuals this plan will be affecting. There is a chance of mistakes happening along the way.
The inability to pay loans has affected the majority of the United States, and this plan will hopefully do as it promises. It has been proven that the current relief programs that were in place have done nothing to help those who have been put into a large amount of debt. This will also take off the strain of family members who have had to take out tremendous amounts of loans to send their child off to get an education.
The debt relief program aims to have their application available in October of this year Once applications have been submitted, students can see the balances of their loans drop within six weeks. The last day for students to apply for loan relief will be December 31, 2023, giving those a little over a year the chance to take advantage of the relief benefits.
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